Adata to Acquire 70% of De Poan Pneumatic in $37.8M Deal
Adata Technology Co., the world's second-largest memory module supplier, is set to expand its business with a significant acquisition. The company plans to buy up to 70% of local air tools manufacturer De Poan Pneumatic Corp in a NT$1.15 billion (US$37.8 million) deal. Adata aims to acquire at least 34% of De Poan's shares through a public tender offer, starting today and lasting until Oct. 21, at NT$32 per share, representing a 11.11% premium.
De Poan, established in 1983, specialises in manufacturing pneumatic tools for global vendors on an original equipment manufacturing (OEM) contract basis. The acquisition is expected to be completed in about two months due to the companies' high complementarity in sales, production, and technology. Adata seeks to diversify into non-memory sectors like electric three-wheel mobility devices through the acquisition. Adata's spokeswoman Gloria Chen stated that the deal with De Poan will help expand overseas, leveraging De Poan's original electronics-manufacturing experience. De Poan's chairman Roger Wen sees the deal as an opportunity to expand into new markets and product categories beyond furniture and construction tools. De Poan's major export destination is North America, accounting for 50% to 60% of its revenue. Adata's revenue is primarily from memory modules, with non-memory business being a minor contributor.
The acquisition, if successful, will allow Adata to diversify its business and expand into new markets. De Poan's expertise in pneumatic tools and manufacturing experience will be valuable to Adata's growth. The deal is expected to be completed in about two months, with Adata aiming to acquire at least 34% of De Poan's shares through a public tender offer.
